(Updated at 1505 GMT)

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Brazil economic activity rises in June

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EM debt funds see worst outflows since May - BofA

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BHP Escondida strike ends

By Lisa Pauline Mattackal

Aug 16 (Reuters) - Latin American stocks and currencies

edged lower on Friday, though indexes tracking the region were

on course for weekly gains after data eased concerns of slowing

growth while keeping the case for a Federal Reserve September

rate cut intact.

MSCI's indexes tracking Latin American currencies

and stocks slipped about 0.2%

each, both slipping from multi-week highs.

For the week, the currency index was on track to gain 0.5%,

while the stocks index looked to rise 3%. More broadly, MSCI's

index of global emerging market stocks was on pace for

its best week since April with a 2.8% gain.

Stronger-than-expected U.S. retail sales data on Thursday

capped a broadly positive week for risk assets, as data brought

relief to investors worried about growth in the world's largest

economy even as traders held bets for a September interest rate

cut from the Federal Reserve.

"Demand hopes are higher given U.S. data yesterday and talk

of more from China given its weaker than expected data... we are

in the Goldilocks one-way traffic zone for risk this week but

all that could change quickly," said Bob Savage, head of markets

strategy at BNY Mellon.

The growth picture for individual economies in the region

also picked up. Data showed Brazil's IBC-Br index, a predictor

of gross domestic product, beat forecasts with a seasonally

adjusted 1.4% rise in June versus a forecast for 0.5% growth.

Brazil's real was little changed against the dollar.

Declining oil prices weighed on the currencies of the

region's producers, with the dollar rising more than 0.2%

against Mexico's peso and Colombia's peso.

Brazil's Bovespa and Argentina's Merval rose

0.1% and 0.5%, respectively, but bourses in Mexico,

Colombia and Peru slipped between 0.2% and

0.5%.

All major regional bourses were set for weekly gains, led by

the Merval's 4.3% rise.

Lower interest rates in the U.S. typically boost demand for

higher-yielding emerging market assets. BNY Mellon flow data

showed larger purchases of high-yielding currencies in Latin

American and emerging central European economies.

EM equities extended their inflow streak for an 11th week,

adding $1 billion in the week to Wednesday, data from Bank of

America Global Research.

However, the data showed investors remain wary of EM debt,

with bond-focused funds notching their biggest outflows since

May at $1 billion.

Copper prices slipped after a deal was reached to halt a

strike at BHP's Escondida copper mine in Chile, easing supply

concerns and weighing on Peru's sol, which lost 0.4%.

The sol was set to snap a three-week winning streak, with a

0.4% weekly loss.

HIGHLIGHTS

** Hopes for revival of Brazil's IPO market evaporate

** US, Brazil float new Venezuela election despite

government, opposition rebuffs

** Brazil's Lula says he doesn't know if central bank head

pick will be Galipolo

Key Latin American stock indexes and currencies

MSCI Emerging Markets 1094.12 1.68

MSCI LatAm 2318.13 -0.15

Brazil Bovespa 134265.6 0.08

Mexico IPC 54124.43 -0.26

Chile IPSA 6426.9 0.34

Argentina Merval 1652038.2 0.497

3

Colombia COLCAP 1355 -0.37

Currencies Latest Daily %

change

Brazil real 5.477 0.1

Mexico peso 18.6731 -0.19

Chile peso 931.51 0.1

Colombia peso 4020 -0.2

Peru sol 3.743 -0.43

Argentina peso (interbank) 941 0

Argentina peso (parallel) 1325 1.8867924

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